A hot beverage vendor having a hot water tank for supplying hot water for hot beverages, such as coffee, tea, soup and chocolate. On entering the tank, water is directed by baffles to a heater in the tank adjacent the bottom of the tank where it is heated. The heated water gradually rises in the tank for flow into the open top of a relatively small collecting tank mounted inside the hot water tank above the heater. The vendor further includes apparatus operable on a vend cycle for dispensing hot water from the collecting tank for the vending of a drink, with the dispensed water being relatively rapidly replaced by heated water flowing into the collecting tank from the main part of the hot water tank.